For over a year now I’ve been paying for my own food etc whilst out travelling predominantly to London etc for meetings. I have to get legitimate breakfast, lunch, tea etc.
I’ve read a lot about per diems but only in relation to employees. My company is only two people, both directors.
How do I log per diems for each of us? Do I simply withdraw £30 per day we are out on the road etc and how would this be logged in quickfile?
Thank you for your time.
Firstly you may want to check the rates on the following link from hmrc:
HMRC Expenses and benefits
You company can of course reimburse you the cost of your expenses tax and NI free. You may want to consider this option as the flat rate allowed but it is very much regulated. We would advise you to read this very useful factsheet from BKL TAX
Per Diem Expense Allowances
Therefore we would recommend the alternative of reimbursing the actual cost of the expenses as you are on travel with providing your receipts as proof of expenses.
These can be reimbursed directly by the Company, as you enter the expenses in Quickfile in the expense nominal accounts.
Some of our clients prefer to create Each Director as a Supplier and enter the receipts to be reimbursed under the ‘Supplier’ name. They find this method easier for reconciliation.
Some others prefer to create an expense nominal account per person eg. JohnSmith Expenses and enter the reimbursments directly there tagging the payments via the bank.
Whatever method you may use, the key is to keep receipts and matching the repayments made to the Directors.
If you choose to continue with flat rates, just tag the flat rates as expenses in the nominal accounts. We would suggest to create one P&L nominal account per Director. Any amount paid over the flat rate agreed by HMRC would be subject to NI contributions and you would have to fill in a P11D at the end of the tax year. So please ensure that you do check your flat rates for travelling in the UK.